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N Cal Attorney, Attorney

Category: Business Law

Satisfied Customers: 8298

Experience: Since 1983

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What are the circumstances that require a relationship between

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What are the circumstances that require a relationship between a lender and a borrower to be regulated by the government? For example, the relationship between institutional lenders such as banks and individuals is subject to consumer protection laws. Are there instances when the relationship between private individuals lending to each other -- such as friends lending money to friends, or parents lending money to their children -- is also regulated? Similarly, will a business that facilitates the tracking of debts and their payment between individuals be subject to particular laws or a type of banking regulation?

You askedAre there instances when the relationship between private individuals lending to each other -- such as friends lending money to friends, or parents lending money to their children -- is also regulated?Such loans between private parties are regulated by the California usury laws.

Similarly, will a business that facilitates the tracking of debts and their payment between individuals be subject to particular laws or a type of banking regulation? If the business is handling money it sounds like it is acting as an escrow company. If not it sounds like it is acting as an accountant.

The nature of the business is to account for borrowing and payments between individuals and to provide standard, non-cash means to handle payments (via PayPal, credit card etc.) while charging a flat or percentage fee for the service. Based on this description, can you suggest the main legal questions that you would advise me to investigate further.

Also, if you can suggest an online or off-line resource to learn more about California usury laws, this would be helpful.

I will tell you that...the things you have to go through to be an Expert are quite rigorous.

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